The Netherlands Tax and Customs Administration has abandoned its planned Microsoft 365 cloud migration in favor of services hosted on infrastructure it controls, paired with European open source alternatives. Email and calendars will move on-premises in 2027, while storage and collaboration tools follow later that year and in 2028.
State Secretary for Finance Eelco Eerenberg laid out the change in a letter to parliament, following an earlier pause in the rollout. The agency picked Microsoft 365 in 2025, but the choice drew criticism. In June, the Dutch Advisory Council on ICT Assessment recommended a rollback, since the rollout had reached only about 5,000 of 47,500 employees. The board said the public cloud design fell short on information security, information processing and future-proofing.
Security worries centered on confidential documents, which now travel over government networks, moving through American servers instead. The board also questioned reliance on standard Microsoft encryption rather than Double Key Encryption, which would give the administration more control.
Meanwhile, end-to-end encryption was off by default for one-to-one Teams calls and unavailable for group calls under the chosen setup. Some of those issues stem from the configuration, not the product itself. Others, such as vendor lock-in and the lack of an exit strategy, are harder to dismiss.
Eerenberg said added datacenter capacity made the on-premises route possible, and the agency will reuse existing licenses where it can to limit new spending. Still, the reversal brings complications. Some planned records management capabilities in the Microsoft 365 package do not exist on-premises, and the administration is still working out replacements.
The move fits a wider European push to cut dependence on US providers, driven partly by concern over the CLOUD Act and its reach into data held by American companies. Early adopters report rough patches, though. Politico quoted an unnamed European Commission staffer who sharply criticized the Element-supplied Teams alternative, but the report does not show how widespread such complaints are. Element chief Matthew Hodgson countered that customers have given positive and constructive feedback overall.
Nextcloud founder Frank Karlitschek welcomed the Dutch decision and said his company added more than two million sovereign workspace seats in 2025. Microsoft declined to comment.
